Vat Rate

The President of the Irish Hairdressers Federation, Gerrard Hynes welcomed the announcement by Minister Noonan to retain the current vat rate in Hairdressing at 9%. We have lobbied long and hard to retain the current vat rate and in conjunction with our colleagues in other hospitality and service industries joined to have our voice heard. The IHF will continue to fight for what is fair and right for our members and as always the bigger the membership the more our voice will be heard.

We are constantly campaigning on behalf of the Hairdressing Industry and this is one small victory that will help to stimulate business. (a recent survey of our members showed that over 90% said that the retention of the 9%vat rate would help stimulate the business and thus increase employment).

In retaining the vat rate at 9% the government acknowledged the service hairdressing provides as an important factor in growing the economy. We need to build on this by continuing to offer the highest skills, service and quality to our customers and positively promote our industry. We would like to thank all those who joined us in fighting to protect our future. Our industry is all about making people look and feel good and never before has it been more important that we do so.

The Irish Hairdressers Federation will continue to provide representation, support, education and advice in all aspects of our industry.

As part of a job creation action plan, in July 2011 the Government reduced the vat rate in the food, tourism and services industry from 13.5% to 9% and later extended that to the end of 2013. This initiative has been incredibly successful across the board in these sectors.Hairdressing has been hit hard by the recession, between 2008 and 2011 turnover has fallen by 15%.Overall employment has fallen by 8% with fulltime employment falling by 22%.

With a huge drop in consumer spend and an increase in the black market economy the hairdressing industry has endured falling numbers of customers, those who do visit the salon are returning less often, resulting in rising running costs and enormous financial uncertainty. The reduction in the vat rate gave the industry a much needed chance to stabilize.Any increase in the vat rate would have a devastating blow on the industry and would halt any modest recovery currently taking place.

Undoubtedly any measure that helps businesses in this sector is helpful. Many of our members have pointed out that the savings were passed on to their customers, - welcome news for consumers. If in the event of an increase in the VAT rate, this in turn will have to be passed onto the consumer. The long term affect of this will be loss of jobs, increased social welfare claims and will further fuel black market economy resulting in further loss of revenue for the government and loss of employment in the industry.

Hairdressing salons are a core employer in rural and urban settings. An increase in the VAT rate would have a far reaching impact within the industry. Further fueling the growth of the ever expanding black market economy. A commitment by the government to retain the 9% Vat rate over a long term would allow businesses to plan for the future with a stronger level of confidence.

The IHF on behalf of its members would strongly urge the government to retain the current VAT rate of 9% within the industry. Such stability will help the industry grow and create more jobs. This would have a positive effect on the hairdressing industry but also on all the sectors it supports with an indirect effect on the growth of other businesses and local communities.

A stable economy encourages confidence in the government, confidence in the government leads to a positive reaction by the consumer to invest in their own economy by spending again… the IHF encourages stability in the economy and supporting local businesses, by doing this we retain and build employment in our own localities.

Over 80% of the IHF membership database welcomes the decision by Minister Varadkar to retain the 9% vat rate until December 2013. This initiative by the Government has had a very positive impact on the hairdressing industry. The reduction of the VAT rate in 2011 has helped some salons stay in business and generate employment.

Greg Clarke, President of the IHF said “I welcome the decision by Minister Varadkar and the government to extend this initiative to December 2013 recognising the positive impact it has had on the hairdressing industry. The reduction of operating costs in any business is welcome. I wouldencourage the government to continue to look at ways of helping small and medium sized businesses in this country survive – employing over 200,000 in the retail, services, catering and food sectors they are the back bone of our economy”.